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The U.S. Department of Energy said yesterday that it has taken $21 million out of a reserve account set up as part of a loan to luxury plug-in car maker Fisker Automotive Inc. in anticipation of a default on a payment the company owes on a federal loan, the Wall Street Journal reported today. The Energy Department said that it "recouped the company's approximately $21 million reserve account—funds that came from the company's sales and investors, not our loan—and will apply those funds to the loan." Fisker's chief executive, Tony Posawatz, said in March that the payment on the $192 million the company borrowed under a federal advanced technology vehicle program was due Monday. Fisker's fate is uncertain. The Anaheim, Calif., company has said that it is trying to find a way to continue operating through a new owner, which would require a resolution with the U.S. government. Fisker has hired bankruptcy attorneys Kirkland & Ellis LLP.

The U.S. Air Force said on Friday that U.S.-based Sierra Nevada Corp. and Brazil's Embraer would continue work on a $428 million contract to build new attack aircraft for Afghanistan after a federal court rejected a challenge by rival Beechcraft, Reuters reported on Friday. The Air Force said the Court of Federal Claims denied Beechcraft's challenge, but the congressional Government Accountability Office (GAO) was still reviewing a separate protest that Beechcraft filed against the deal. Beechcraft, which emerged from chapter 11 protection earlier this year, sued the Air Force to halt work on the planes while federal auditors reviewed the company's protest. The Air Force had authorized Sierra Nevada and Embraer to keep working on the order, despite Beechcraft's protest.

ATP Oil & Gas Corp. lender Credit Suisse AG plans to bid on the company's deep-water drilling assets at an auction next week, Dow Jones Daily Bankruptcy Review reported today. In total, ATP owes its top-ranking lenders, including Credit Suisse, $600 million. ATP won court approval in February to sell leasehold and other working interests in 23 deep-water areas off the shores of Texas and Louisiana, including related production facilities, pipelines, machinery and equipment.

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Eastman Kodak Co. says that it still plans to file its plan for how it expects to get out bankruptcy by the end of this month, though the company has received bankruptcy court approval to take longer, the Rochester (N.Y.) Democrat and ChronicleAllan Gropper last week approved a request by Kodak to give it until the end of May to file a reorganization plan. When Kodak in February asked for this most recent extension, the company said its to-do list included selling off its document imaging and personalized imaging businesses, dealing with Kodak pension plan claims in the United Kingdom, and getting its finances in order. Kodak last week announced it had signed a tentative agreement with Japanese electronics company Brother Industries Ltd. to sell its document imaging business — which is primarily a variety of document scanners — for $210 million.

One of Residential Capital LLC's largest unsecured creditors is seeking court approval to sue the mortgage firm's parent, Ally Financial Inc., increasing pressure on the government-owned auto lender to pay more money, Dow Jones Newswires reported yesterday. Wilmington Trust, a trustee for $1 billion of ResCap senior unsecured bonds, renewed arguments on Friday that Ally stripped ResCap of valuable assets prior to the mortgage subsidiary's chapter 11 filing last May, assets that Wilmington says are worth billions of dollars. A key transaction at issue is the transfer of ResCap's ownership stake in Ally Bank, the depository subsidiary of Ally Financial that Wilmington and other creditors claim was ResCap's most valuable asset. Ally completed that transaction in 2009, a move Wilmington says exacerbated ResCap's financial problems as it faced rising litigation over soured residential mortgage-backed securities.

Billionaire investor Wilbur Ross told the ABI Commission to Study the Reform of Chapter 11 that the hourly billing system that they use to get paid is “primitive” and encourages frivolous legal actions, the Wall Street Journal's Bankruptcy Beat blog reported. A bankruptcy professional’s hourly rates have grown "infinitely faster than inflation for as long as I can remember," Ross said Friday at ABI's Annual Spring Meeting, which more than 1,000 people had registered to attend. Bankruptcy judges who are tasked with approving the fees have a tough time figuring out what’s appropriate, he said. Ross suggested that the problem could be fixed if attorneys either were not paid for pursuing losing actions or if compensation were capped using a benchmark that could be based on hourly rates in recent cases. Bankruptcy professionals who are working on exceptionally difficult cases like that of Lehman Brothers or Washington Mutual could ask a judge for special permission to be paid more, he said.

Struggling shipping company Excel Maritime Carriers Ltd. is nearing a restructuring deal with its lenders but could still have to file for chapter 11 in the U.S., Dow Jones Daily Bankruptcy Review reported today. A restructuring professional said that he believes the company is "close" to hashing out a deal with lenders under its $1.4 billion syndicated credit facility. But a negotiated bankruptcy filing could also be in Excel's future, since the company still has $150 million in convertible debt it needs to deal with.

A Delaware bankruptcy judge approved a settlement between electric car maker Fisker Automotive Inc. and its former battery supplier, the Associated Press reported yesterday. The settlement reduces Fisker's claims against the company formerly known as A123 Systems Inc., now called B456 Systems Inc., by almost 90 percent. Fisker will be granted a $15 million unsecured claim on an initial claim of $48.7 million against A123 for breach of warranty. Fisker’s $91.2 million claim for rejection of its supply agreement with A123 will be disallowed.

Bankruptcy Judge Robert E. Gerber yesterday cleared regional carrier Pinnacle Airlines Corp. to leave chapter 11 as a unit of Delta Air Lines Inc., a decision that streamlines Pinnacle's operations and costs in an increasingly consolidating airline industry, Dow Jones Newswires reported yesterday. Pinnacle said that it expects to be out of bankruptcy by May 1, and that the only regulatory approval it needed--an obscure one from the U.S. Department of Transportation--will not delay the deal. Pinnacle used its bankruptcy to cut deals with its three main unions that call for deep concessions among those workers. It also focused on cutting its operating costs in the ever-competitive airline industry and ended up in the wings of Delta, its only remaining customer. The deal calls for Pinnacle to nearly double the number of large planes it flies for Delta to 81 and to phase out its fleet of smaller planes.

Bahrain-based investment firm Arcapita Bank said that it has filed an amended reorganization plan in its U.S. bankruptcy case that has the support of its main creditors, Dow Jones Daily Bankruptcy Review reported today. Like Arcapita's original plan, which it filed in February, the amended plan envisions the company ceasing to make new investments and focusing on selling its existing portfolio of assets to settle creditor claims, according to court documents.